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The Dominican company Tree Farm Token has launched an international investment project to develop, manage and commercialize a plantation of 2,600,000 mahogany trees on a 2,000-hectare site in the Dominican Republic.

Currently on initial fundraising phase, Tree Farm Token project aims at combining digitalization and forestry. Tree Farm Token commits to grow the trees following an intensive tree management plan, controlled by external auditors and addressed to maximize the commercial wood volume per tree.

In details, the land is planned to be split into 20 self-sufficient farms, managed individually. Tree Farm Token investors buy the trees at an early stage, paying the sowing price. Investors pay no maintenance costs, as the operation is self-financing.

"After 10 years, once mahoganies have reach adult age and cutting size, they will be commercialized in the wood market for a total approx. value of 1,8 billion euros, in a realistic scenario," explain the Tree Farm Token Team.

Tree Farm Token will manage the sale of adult mahoganies to international wood trading companies, addressing the full profit to pay the investors (owners of the tokens). Tree owners can also sell their trees in regulated online markets before the plants reach maturity.

"Most trees take several years to grow. The long term required for trees to reach maturity and be commercialized is a barrier for some potential investors," says Tree Farm Token CTO Alexis Texeiro. "A new market player aims at demolishing this barrier by digitalizing the trees and trading them in online platforms. This solution brings a liquidity tool for those investors whom would like to make their profits before the trees are sold."

Beyond the commercial implications of the operation, Tree Farm Token project should also bring social and environmental benefits to local communities. "Besides creating around 500 jobs, we have agreed with the Dominican Government to contribute to the their reforestation policies by creating a forest of more than 2 million trees," underlines Mr Texeiro.

"Furthermore, in Tree Farm Token we have also agreed to create Bigotes Blancos, a social action association with the objective that no children in the region starts their day without having breakfast."

Speaking about the environmental impact of the project Mr Texeiro adds:"Each mahogany tree can offset 47kg CO2 per year. 2,6 million mahogany trees can offset the total CO2 emissions of a tourist enclave like Punta Cana."

When we talk about the exploitation of tropical forests, many people associate it with deforestation. They imagine thousands of hectares of virgin forests destroyed, century-old trees burned to the ground and nature disfigured forever – all for the sole purpose of creating agricultural land or grazing to obtain land. Yet there is a major difference between deforestation and sustainable forest management.

Robert Hunink, President of ATIBT explains: “European consumers misunderstand the role of forest managers in attributing tropical deforestation, mainly due to the "mining" of forest soil fertility for agriculture or firewood. Through the Fair&Precious brand, they will learn that the actors of our ecosystem do not plunder, but on the contrary only pick one or two trees per hectare, on the same plot, once every thirty years."

To date, only companies certified in legal and sustainable forest management (certifications are issued by FSC or PEFC and controlled by certifying bodies such as Bureau Veritas, SGS Quailfor or Rainforest Alliance) can benefit from the Fair&Precious brand. In addition to these certification standards, they must comply with the country’s applicable forest code (after validation of control procedures and obtaining legal certifications). The certification is then valid for a period of five years.

The ratio of trees harvested is far lower than those left to grow naturally

At present, the vast majority of tropical timber comes directly from the virgin forest (without harvesting control) or from large plantations which are gradually replacing virgin forests. The first is simply illegal poaching, while the second is a monoculture of exotic tree varieties that degrade the soil, threaten biodiversity and accelerate climate change.

The Fair&Precious programme offers a sustainable alternative: preserving forest resources by harvesting less than its natural increase. Young trees, as well as seed trees, are systematically left standing, since they contribute to the renewal of the forest.

Forest managers create real local economic and social development

Unlike many unscrupulous players, Fair&Precious members are committed to working for local economic and social development by contributing to generate income for people and by providing them with access to services such as education, medical care and housing. Local processing is thus favoured and training in various forestry and wood trades is provided by the network’s member concession holders. By providing employment and resources to local populations, they are fighting against exodus and urban concentration.

The mission of forest managers is also to fight poaching

With its sustainable approach, the Fair&Precious brand also aims to protect fauna and flora, by ensuring that animals’ habitats are made safe. In blocking the illegal trafficking of forest products, they are also able to develop programmes to combat poaching and restock endangered species.

Tropical wood is in fact the most environmentally friendly material available

Today, in the absence of a guarantee, consumers often turn away from tropical wood and choose materials with a much lower environmental performance record. Fair&Precious aims to restore confidence among tropical wood users and to promote the acquisition of products from sustainably managed tropical forests. The exceptional technical performance of tropical woods and their durability properties are highlighted. Indeed, these materials have excellent resistance to external environmental factors and require no chemical treatment.

Tropical wood is particularly useful and efficient in the construction of garden decking, interior and exterior furniture, shipbuilding, etc. Fair&Precious’ objective is not to massively increase volume sales, given its commitment to preserving the forests, but to enable these “precious" woods to regain their true place on the market.

A new science-policy report from the European Forest Institute (EFI) demonstrates that using wood-based products to substitute greenhouse gas intensive-materials can have important climate benefits.

The authors reviewed 51 existing studies to provide an up-to-date synthesis of scientific knowledge on the greenhouse gas emissions of products made from wood and from alternative materials, over their entire lifetime.

While the positive role of forests in climate change mitigation is generally well perceived, the contribution of wood products to mitigation is much less known and understood. Current reporting on greenhouse gas emissions to the United Nations Framework Convention on Climate Change (UNFCCC) and related processes does not attribute the substitution benefits of wood-based products directly to the forest sector. However, this information is important when developing optimal strategies on how forests and the forest sector can maximise their contribution to climate change mitigation.

The study concludes that for each ton of C in wood products that substitute non-wood products, average emissions are reduced by approximately 1.2 ton C. Expressed in a different unit, this corresponds to about 2.2 ton of CO2 emissions reduction per ton of wood product. The substitution effects vary significantly, depending on the wood product and technology that is considered and the methods used to estimate emissions.

The study coordinator, Pekka Leskinen, said: “It is also crucial to remember that the greenhouse gas substitution impact of wood products is only one component in climate change mitigation. The substitution factor alone should not form the basis of policies, since the overall climate impacts of forests depend also on forest carbon sinks, forest soil and carbon stored in wood products.”

The study also identifies limitations and important research gaps that should be covered to have a better understanding of the substitution effects – for example there is a lack of knowledge on the climate impacts of emerging wood-based products like textiles and biochemicals.

Created in November 2017, the Fair & Precious collective label aims to persuade European consumers to purchase products that use ecological and responsibly-sourced materials. By allowing the final consumer to clearly identify African timber and guaranteeing that it does not come from illegal distributors but from logging producers that are managed sustainably and responsibly, Fair&Precious has become a real landmark.

"Whether promoters or prescribers of the label, F&P members believe in the emergence of a more humane economy, protecting both humans and nature in a relocated economy," explains ATIBT spokesperson. "Beyond the environmental dimension of its commitment, F&P puts all its energy into defending social and societal causes such as respect for local populations, their education and their health."

In order for a forest concession holder to benefit from the Fair&Precious label, they must both be a member of ATIBT and use a control procedure approved by the ATIBT Board of Directors, such as FSC or PEFC sustainable forest management certification. These labels are controlled by certification bodies such as Bureau Veritas and are there to guarantee the application of strict rules to ensure the traceability of the material from the forest to the finished product.

"In 2016, only 30%* of the products made in the European Union with tropical wood were certified as being produced in a sustainable way. If the Netherlands (63% in 2016), the United Kingdom (49%), Germany (20%), France (12%), Belgium (12%), Italy (5%) and Spain (4%) committed to a 100% Fair&Precious target, this would represent 85.6% of all EU purchases and especially 5.3 million additional protected hectares," underlines ATIBT.

Benoit Jobbé Duval, Director of ATIBT commented: "We are very proud to have brought together so many prestigious partners around our project, all of whom are fighting the same battle, to guarantee the future of tropical forests, to participate in their sustainable management and above all to make citizens aware of their missions and their importance.”

Fair&Precious' 10 commitments through its manifesto

Manage and protect forests to combat climate change

Preserve forest resources by harvesting less than naturally grows

Develop knowledge on biodiversity to facilitate the restocking of species

Ensure the maintenance of the wildlife's living space

Implement programmes to combat environmental crime against fauna and flora

Contribute to the well-being of populations by facilitating their access to education, health care and housing

Stimulate the economies of producing countries by enhancing the value of forests and promoting local wood processing

Set up training courses in forestry and woodworking professions

Provide technical knowledge on the diversity of tropical species and their uses

The UK Forest Market Report 2018, launched in London, has revealed that patience and shrewd forestry investment choices have paid dividends over the last 12 months.

Many UK forest owners who purchased their property 30 or 40 years ago are now reaping exceptional rewards for patiently growing their timber assets. Not only is their investment showing returns of 13.9% per annum – one of the best performing asset classes - but the price of standing timber has soared 30% in the last year alone.

The 20th edition of The UK Forest Market Report is produced by Tilhill Forestry and John Clegg & Co and provides analysis of this growth and further commentary about forestry as an investment choice. The report also features a study on the lowland woodland sector.

In discussing the performance of the commercial forestry market in the year to September 2018, the report describes a “brisk and robust” sector. A total of £104.2m of forest properties were traded in 2018. This is a 6% drop from 2017 but, interestingly, the market comprised a smaller number of higher value sales (57 in 2018 compared to 87 in 2017) with an average size of 196ha (149ha in 2017) and an average price of £1.83m (£1.28m in 2017). Scotland retained its dominant position in the marketplace with 69% of the sales recorded.

The report points out that standing timber prices have rocketed by around 30% over the last 12 months - great news for owners whose forests are now ready to harvest.

Additionally, despite political uncertainty, the report suggests that new agricultural policies may be on the horizon that will encourage a more integrated approach to land use particularly with forestry and farming.

The report says: “Overall we believe that the market continues to behave robustly in the light of the wider economic environment, demonstrating the strength and resilience of forestry as a long-term investment. New investors are coming through to investigate the marketplace with many of these based within the EU and reassuringly confident to invest in the UK.”

Peter Whitfield, Business Development Director for Tilhill Forestry, explains: “Motivations for investors vary but the main reasons are long-term financial returns, the potential for tax planning, long-term capital growth particularly within a pension, or the amenity value.

“The wider economic climate remains highly volatile but, in this environment, the security of owning real assets, the improvement in timber prices and general confidence that these can be sustained and strong political support for the industry together with the amenity values mean that forestry remains an attractive choice for many investors.”

Fenning Welstead, Director John Clegg & Co., said that the level of competition was “remarkable” and that the demand from investors seeking ownership of forestry assets has never been stronger in his experience.

He added: “The upward movement in the price of timber in the last 12 months has been staggering. It has been driven partly by the weak pound and more expensive imports but also, I believe, by the dawning realisation that the supply of fibre is finite.

“The UK is the second largest timber importer in the world. With more interest in forestry and the wide range of benefits forests offer, and an increase in planting, perhaps we can start to reduce the amount of timber we import.”

More conifers were planted in Scotland last year than in any year since 2000 and encouragingly, the report says, Forestry Commission Scotland has reported strong demand for woodland creation schemes for 2018/19 and 2019/20 with over 12,000ha being assessed - well exceeding their target of 10,000ha per year.

The forestry grant budget in Scotland has been increased for 2018/19 to accommodate the increased demand - a clear sign of how the Scottish Government perceives the importance of forestry as part of the rural economy.

The report welcomes this and other “very positive steps” taken in support of commercial afforestation such as the announcement of a Forestry Investment Zone in the north of England, the appointment of two Forestry Commission Woodland Creation Officers and the appointment of Sir William Worsley as the Tree Champion for England. Forestry also enjoyed a mention in the latest budget with £60 million of funding to be put in place for tree planting in England.

Another encouraging sign centres on the concept of Natural Capital which is at the heart of the UK’s 25 Year Environment Plan. It recognises that forestry is more than just an asset for timber extraction and offers much broader societal benefits such as cleaner air, flood reduction, carbon storage and health improvement.